Corner of Berkshire & Fairfax Message Board

General Category => General Discussion => Topic started by: jeffmori7 on February 07, 2011, 07:30:32 PM

Title: Two recent articles by Francois Rochon
Post by: jeffmori7 on February 07, 2011, 07:30:32 PM
For those interested, two recent articles by Francois Rochon from Giverny Capital, reviewing the basis.

http://www.givernycapital.com/assets/documents/136/The_Gazette___An_enriching_strategy_for_quality_assets_jan_2011_.pdf?1295903027

http://www.givernycapital.com/assets/documents/139/High_confidence_humble_approach_happy_investor.pdf?1296567592

Title: Re: Two recent articles by Francois Rochon
Post by: stahleyp on February 08, 2011, 06:13:46 AM
First time I've heard of this guy. Here is his site and track record for those who are interested.

http://www.givernycapital.com/en/rendements
Title: Re: Two recent articles by Francois Rochon
Post by: Parsad on February 08, 2011, 11:30:15 AM
Francois is a terrific guy and good investor.  I've known him for several years.  Cheers!
Title: Re: Two recent articles by Francois Rochon
Post by: Partner24 on February 08, 2011, 07:25:08 PM
I've known some people from his firm for several years too.

They have their niche. They invest mostly in great companies managed by great people for a fair to good price and sometimes keep the shares for a very long period of time. I know that everybody is unique when there no "next something" or "next someone", but even if they are not the same, their investment style reminds me the one they have at Sequoia Fund.

I would feel good to put some part of my family's money in their fund. There is not a lot of investment firms in wich I have that level of trust and confidence!

Cheers!
Title: Re: Two recent articles by Francois Rochon
Post by: randomep on December 25, 2013, 08:31:39 AM

Hi all,

I want to revive this thread. I am really curious about Giverny Capital, their results are legendary (if true). Does anyone have any first hand experience with them? Anyone a customer?

Also they have stopped posting any reports after the 2012 annual. Does anyone have any quarterly reports they can post?

thanks in advance!
Title: Re: Two recent articles by Francois Rochon
Post by: jay21 on December 25, 2013, 01:56:48 PM

Hi all,

I want to revive this thread. I am really curious about Giverny Capital, their results are legendary (if true). Does anyone have any first hand experience with them? Anyone a customer?

Also they have stopped posting any reports after the 2012 annual. Does anyone have any quarterly reports they can post?

thanks in advance!

There was link to an interview from 2013 on the site: http://www.givernycapital.com/assets/documents/179/TWST_04_15_13_Giverny_Capital_.pdf?1386962107

Some of his picks are : WFC, MTB, UNP, and FAST
Title: Re: Two recent articles by Francois Rochon
Post by: Yours Truly on December 25, 2013, 07:09:59 PM
Read his articles on montrealgazette.  He writes an article once or twice a month and usually highlights a potential or current holding of theirs and their rationale.
Title: Re: Two recent articles by Francois Rochon
Post by: randomep on March 16, 2014, 10:51:06 PM

Giverny Capital final posted their 2013 annual letter. Wow another year of beating the indicies! Can anyone give me a hint as to what they hold right now? :)

http://www.givernycapital.com/assets/documents/184/Giverny_Capital___Annual_letter_2013_web_.pdf?1394797561
Title: Re: Two recent articles by Francois Rochon
Post by: PJM on March 17, 2014, 12:46:32 AM
His interview last year highlights some of his holdings
http://www.givernycapital.com/assets/documents/179/TWST_04_15_13_Giverny_Capital_.pdf?1386962107

Wells Fargo & Company (WFC); M&T Bank (MTB); Bank of the Ozarks (OZRK); Fastenal (FAST); CarMax (KMX); The Walt Disney Company (DIS); Union Pacific (UNP); Berkshire Hathaway (BRK-A) and JPMorgan Chase & Co. (JPM).
Title: Re: Two recent articles by Francois Rochon
Post by: randomep on March 17, 2014, 05:59:24 AM
thanks!
Title: Re: Two recent articles by Francois Rochon
Post by: learner on April 01, 2014, 09:17:37 AM
Hi-
I'm trying to read articles written by Francois in Montreal Gazette and they only go back to Jul 2012 (http://www.montrealgazette.com/business/topic.html?t=person&q=francois+rochon).  I was wondering if any of guys found some of his older articles?

Cheers
Title: Re: Two recent articles by Francois Rochon
Post by: peter1234 on April 01, 2014, 10:48:53 AM
Have you tried this already?

http://www.givernycapital.com/en/medias
Title: Re: Two recent articles by Francois Rochon
Post by: learner on April 01, 2014, 11:03:21 AM
Hi Peter123 - Thanks for the response.  I actually read all the articles mentioned at http://www.givernycapital.com/en/medias, was looking for the older stuff.
Title: Re: Two recent articles by Francois Rochon
Post by: vikx01 on April 01, 2014, 12:18:09 PM
Does anyone have the redacted versions of their annual reports from 1996 to 2000? I picked up their reports from 2001 a couple of days ago and finished them all in a few sittings. Very high quality stuff.
Title: Re: Two recent articles by Francois Rochon
Post by: Charlie on March 22, 2015, 02:11:59 AM
Giverny Capital released their 2014 annual letter:

http://www.givernycapital.com/en/doc/196/Giverny_Capital_-_Annual_Letter_2014_web_.pdf


Cheers!
Title: Re: Two recent articles by Francois Rochon
Post by: Partner24 on March 22, 2015, 05:02:05 AM
As always, an excellent letter.
Title: Re: Two recent articles by Francois Rochon
Post by: crocodon on March 23, 2015, 02:50:11 AM
Fantastic letter! Thanks for bringing my attention to this!
Title: Re: Two recent articles by Francois Rochon
Post by: Partner24 on March 23, 2015, 06:02:06 AM
I know then and I can tell you all that they are very classy, disciplined and talented investors. They have that ability to keep their investing style intact in both good and bad times and their strategy work. They are one of the very very few investors that would I trust to manage my family funds if I were to stop picking individual stocks myself.

Cheers!
Title: Re: Two recent articles by Francois Rochon
Post by: mhdousa on March 23, 2015, 06:23:45 AM
Anyone know if they take US investors?
Title: Re: Two recent articles by Francois Rochon
Post by: Phaceliacapital on March 23, 2015, 06:29:14 AM
Thoughts on AUM?
Title: Re: Two recent articles by Francois Rochon
Post by: VersaillesinNY on March 23, 2015, 01:37:37 PM
Nice French-Canadian investors who have found their yardstick in the Graham-Buffett-Fischer-Lynch approach.
Francois Rochon was an “early” investor in Fairfax from 1996-1999 and again in 2002.
He is a friendly guy and a great networker who has met Prem Watsa, Francis Chou and more recently legendary investor Peter Lynch.

From its track record, we can appreciate talented skills in analyzing and picking the right companies in order to build a concentrated portfolio. AUM seems to be $80 M about three years ago, definitely higher now. The fund’s management fee is undisclosed.

Like many of us, Giverny seems to get ideas from Berkshire. Here are some companies (past & present) in both “partnerships” portfolios:

=> Wells Fargo, M&T Bank, Union Pacific, BNSF, Wal-Mart, P&G, BYD and American Express.

The second important idea generator for Giverny is Sequoia Fund. Here are some companies (past & present) in both equities portfolios:

=> Valeant, Precision Castparts, O’Reilly Automotive, Fastenal, Mohawk, Omnicom, Google and Wal-Mart.

I’m not taking away Rochon’s credit for cloning the right companies at the right time and outperforming the indexes over the long term. Rochon and his team are also innovators who have generated their own investment ideas:

=> Berkshire, Fairfax, Bank of the Ozarks, Disney, Buffalo Wild Wings, Resmed and many more.

As a fund trying to grow AUM, Giverny doesn’t publicly disclose:

- its current top 5-10 positions
- its returns net of fees
- its cash level

Therefore, it’s difficult to evaluate the percentage of Giverny’s portfolio originated from in house ideas versus cloning strategy.

Quote
In this business you have the innovators, the imitators, and the swarming incompetents.
Bill Ruane
Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 24, 2015, 08:08:02 AM
I would just mention that one could do a lot worse than following the lead of the Sequoia Fund - I have enjoyed their analysis of many companies over the years - though I see Valeant a little differently than they do now.

Care to elaborate on your views of Valeant?
Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 24, 2015, 10:40:07 AM
I would just mention that one could do a lot worse than following the lead of the Sequoia Fund - I have enjoyed their analysis of many companies over the years - though I see Valeant a little differently than they do now.

Care to elaborate on your views of Valeant?

Not really.  If you don't have anything nice to say....as the saying goes.

Actually, it is not that I don't have anything nice to say, I absolutely admire what they have built and what the value that Mike Pearson has created.  But I have other thoughts too that aren't positive, so I'll just leave them alone.

But negative thoughts is exactly what I was looking for..  :-\
Title: Re: Two recent articles by Francois Rochon
Post by: AzCactus on March 24, 2015, 10:43:59 AM
I'm sure there's already a thread for Valeant.  At this point its probably pretty long.  Let's not get derailed.  lol
Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 24, 2015, 10:49:59 AM
I'm starting to do some research on Giverny and Rochon. Always looking for good places to invest my capital if I ever decide to stop managing it myself (in part or all), or maybe for my wife's. Seems interesting so far.

Anyone knows what's the minimum investment in their fund?

Sounds like you can only invest through a National Bank account. Is that correct?

Thanks in advance.
Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 24, 2015, 10:51:29 AM
I'm sure there's already a thread for Valeant.  At this point its probably pretty long.  Let's not get derailed.  lol

There is and Liberty, you are a smart and thoughtful investor and I guarantee you have thought more about Valeant than I have and thus it is more squarely in your circle of competence than mine.

No worries if you don't want to discuss it. I'm always looking for more info in case I come across a line of thinking or a piece of info that I hadn't considered before, which might make me change my mind.

Just promise that if you have something groundbreaking, you'll private-message me or post it in the Valeant thread ;)
Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 24, 2015, 12:21:58 PM
I've known some people from his firm for several years too.

They have their niche. They invest mostly in great companies managed by great people for a fair to good price and sometimes keep the shares for a very long period of time. I know that everybody is unique when there no "next something" or "next someone", but even if they are not the same, their investment style reminds me the one they have at Sequoia Fund.

I would feel good to put some part of my family's money in their fund. There is not a lot of investment firms in wich I have that level of trust and confidence!

Cheers!

Partner, has your thinking on the firm changed in the years since you posted the above? Same question for Sanjeev or anyone else who wants to share their current opinion on Giverny. Thanks.
Title: Re: Two recent articles by Francois Rochon
Post by: Partner24 on March 24, 2015, 01:30:23 PM
Liberty,

I've known them since 12 years now. My very good opinion about them have not changed over the years because they keep their discipline, determination, their investing style in good and bad years, their candor and desire to keep getting better by learning from past mistakes. Those are great qualities for investors and these can easily be put to test especially in the money management business. They are in an industry filled with "sharks", big egos and volatile clientele that sometimes reach for the savor of the day. So it would be easy to lose the focus and they do not.

Their long term investing results have not been achieved because of chance. To me, they are the testimony of who they are.

Cheers!

Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 24, 2015, 01:36:13 PM
Thank you Partner24, I appreciate you sharing your perspective.
Title: Re: Two recent articles by Francois Rochon
Post by: peter buffet on March 24, 2015, 03:17:17 PM
Minimum for investment with Giverny is 250 000 CAD.   
Title: Re: Two recent articles by Francois Rochon
Post by: Alekbaylee on March 24, 2015, 06:07:27 PM
Minimum for investment with Giverny is 250 000 CAD.

Really?
Used to be CAD 100 000 a few years ago.
Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 24, 2015, 06:57:35 PM
I heard 100k from a good source too.
Title: Re: Two recent articles by Francois Rochon
Post by: Parsad on March 24, 2015, 10:29:49 PM
It's been a couple of years since I last spoke to Francois, but my opinion would not change about him.  He's an honest, good guy and a good investor.  He has a good team as well. 

The one caveat I would give, and I always give this...doesn't matter who the manager is:

In examining a manager's long-term results, I never look at what he did managing his personal portfolio, or money for family or friends.  It's not the same thing...not at all...not even if it is audited.  Managing capital from people you have more than an arms-length fiduciary responsibility to is completely different. 

Why?  Because your parents and your best friend's Mom or Dad most likely won't pull the capital from you...and they also won't question you when you put 100% of it into Berkshire Hathaway or some other company.  So whenever I see personal portfolio or family/friends data incorporated into long-term results, that caveat always comes to mind. 

That being said, Francois has still done very well if you exclude the 1993-1998 years...so the caveat is somewhat irrelevant in this case.  Cheers!
Title: Re: Two recent articles by Francois Rochon
Post by: Aurelius on March 25, 2015, 02:20:21 PM
Guy Spier recommends him:
http://aquamarinefund.com/who-would-i-invest-with/
Title: Re: Two recent articles by Francois Rochon
Post by: Liberty on March 25, 2015, 02:23:06 PM
Thanks Sanjeev and Aurelius!
Title: Re: Two recent articles by Francois Rochon
Post by: Aurelius on April 15, 2015, 08:14:30 AM
Another interesting article:
http://montrealgazette.com/business/francois-rochon-the-experience-of-investing-in-carmax?__lsa=3de4-f83a

Quote
"There are many lessons from the last eight years. First, even if I paid a higher P/E than usual for CarMax, it turned out OK in the end. EPS went up 250 per cent and the stock went up 250 per cent. In the long run, the stock market reflects the increase in the intrinsic value of a company.

But in the short run, I had to be able to live with wide fluctuations in CarMax’s stock price. I made 250 per cent on my initial investment but I had to live through a 70 per cent temporary drop in the stock price. Thankfully, this does not happen often but when it does happen, you have to be able to bear it."
Title: Re: Two recent articles by Francois Rochon
Post by: VersaillesinNY on May 12, 2015, 02:04:59 PM
Here goes Giverny’s 13F and its top positions.

http://whalewisdom.com/filer/giverny-capital-inc

In addition to Berkshire & Sequoia, their third source of ideas seems to be Markel (CarMax, Disney & Markel).

AUM at $ 456 M, François & his team are doing well.
Title: Re: Two recent articles by Francois Rochon
Post by: 100 Shares on March 23, 2016, 06:17:41 PM
2015 Letter is out: http://www.givernycapital.com/en/doc/206/Giverny_Capital_-_Annual_Letter_2015_web_.pdf

If anyone here is a investor in the fund, do you mind posting the full letter?
Title: Re: Two recent articles by Francois Rochon
Post by: Charlie on March 16, 2017, 12:41:02 PM
2016 letter is out: http://www.givernycapital.com/en/doc/214/Giverny_Capital_-_Annual_Letter_2016_web_.pdf

Cheers!
Title: Re: Two recent articles by Francois Rochon
Post by: Cigarbutt on March 16, 2017, 01:42:36 PM
Thank you Charlie.
I tend to read the report every year.
He may not be well known as he comes from the other solitude.
He is one of the fund managers I respect a lot. Has a very satisfactory long term record, a consistent approach and recognizes and even discusses mistakes.
I like the quote from Mr. Munger: "I like people admitting they were complete stupid horses’ asses. I know I’ll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn".
And I'll add this one too: "There’s no way that you can live an adequate life without many mistakes.  In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke".
Time to read and think.
Title: Re: Two recent articles by Francois Rochon
Post by: Cigarbutt on March 17, 2017, 02:07:58 PM
--Interesting comment about turnover:

"In other words, average "passive" investors hold their ETFs only about 47 days!  It’s even worse with the SPY index fund (linked to the S&P 500), with an average holding period of around 12 days, or an annual turnover rate of around 3,000%.  This compares with an average turnover rate of 120% for stocks in general.  Just to give you an order of magnitude for the purpose of comparison, the turnover rate of our model portfolio is around 14%, which means that we keep our stocks on average for about 2,500 days at Giverny Capital!"
 
So now long term investing is when you hold your investment for more than 3 months? How will this crowd behave if/when somebody shouts fire?

-Mr. Rochon talks about his podium of errors. Impressive.

--On Valeant: "Our confidence in the CEO was, in retrospect, a serious misjudgment of the person and his leadership qualities.  Clearly, under pressure to maintain a high rate of growth, deleterious decisions were made.  This was coupled with a significant increase in indebtedness."

Valeant has a separate thread. Mr. Rochon considers the investment a mistake even if they made money on it. I prefer this kind of mistake but like, the Giverny guys, it may be important to learn from those as well. Leverage is beautiful when there are no headwinds.

--On Alimentation Couche-Tard: "In 23 years, the stock has multiplied by more than 200 times." "This omission mistake has been haunting me for more than 20 years."

Me too (in a big way). For those who are not familiar, this company is not about technology or revolutionary products. It has become a global consolidator in the convenience store industry! The history is fascinating. I am reading (in the huge pile on my desk) the founder's biography. This may be an idea for another thread.
The conclusion here is that, if you can spot, a true long term wonderful compounder, be ready for pay for a good price. When I was in university, I bought myself a car (VW). If, instead, I would have put the money in ATD.B, today the investment would be worth around 3 millions (that's a lot of Ferraris). Food for thought. I know, we should not think like that. Shakespeare had something to say about this line of thinking: "We know what we are but not what we may be." (Hamlet, Act 4, Scene 3) I say that, maybe, it is better not to know. This story is particularly frustrating because I was able to witness (scuttlebutt) first hand the transformation that the acquired stores went through after the serial acquisitions and this was within pretty much anybody’s circle of potential competence. In the years 2000's, I was always behind the ball on this one. In 2008, I finally put my finger on the trigger. Chose other targets.
The founder CEO Alain Bouchard pulled the trigger himself in 2008 and  purchased 16.9 million shares. Since then the share price went up at least 12x and they introduced a dividend since. Do I need to say more?

One of my long term goals on this Board (my take of long term is not 3 months, it's more like 10 years) is to help uncover and dissect such a long term compounder going forward.

--On Mohawk industries (carpet manufacturer): The Giverny group did not double down in the 2008-9 downturn.

I have held MHK too and my mistake is different. I picked it up in the 2008-9 period as a investment that was blasted by the real estate downward spiral of the subprime unraveling and that would recover to intrinsic value relatively rapidly. I got that right but failed to see the long term compounder characteristics of the firm after. It became a bagger. Could have been a multi-bagger. Food for thought.

--On politics, Mr. Rochon says: "It would be a mistake to let our political ideas, as valid as they may seem in our point of view, to blurry our investment decisions". I would tend to agree but then again who I am to say?
Title: Re: Two recent articles by Francois Rochon
Post by: mranski on December 29, 2017, 04:05:30 PM
I watched a Google Talk YouTube video with Francois dated dec 5/17, and thought it was good. Apologies if it was posted elsewhere.
Title: Re: Two recent articles by Francois Rochon
Post by: Cigarbutt on December 29, 2017, 06:52:02 PM
You are probably referring to his "art of investing" talk.
Liked it too. Refreshing and full of candor.

Have you looked at the latest 13-F?
https://whalewisdom.com/filer/giverny-capital-inc

Often see common targets on the radar.
Title: Re: Two recent articles by Francois Rochon
Post by: mranski on December 29, 2017, 08:53:07 PM
Thanks, I didn't have current holdings.
Title: Re: Two recent articles by Francois Rochon
Post by: Charlie on March 22, 2019, 05:38:36 AM
2018 annual letter is out: http://www.givernycapital.com/en/doc/224/Giverny_Capital_-_Annual_Letter_2018_web_.pdf

Cheers!
Title: Re: Two recent articles by Francois Rochon
Post by: John Hjorth on March 22, 2019, 12:13:32 PM
Thank you for sharing, Charlie,

It's much appreciated. Somehow, over the last few years [since I got aware Mr. Rochon, his doings and his writings], reading stuff written by Mr. Rochon has been growing on me - quite a lot.

There is however one paragraph in the client letter that I'm a bit puzzled about:

Quote
A few words about big American banks ...

... That's why we own shares in four US banks at the time of writing this letter.

How do you perceive it? -Personally, I read it as if Mr. Rochon has bought more big US Banks since after the "as per" date of the last 13-F/HR filing for Giverny Capital [in 2019, as per EOP 2018Q4]. - Please note the word "big" in the paragraph header. In the last Giverny Capital 13-F/HR I only see JPM as one of the "big ones".
Title: Re: Two recent articles by Francois Rochon
Post by: Cigarbutt on March 22, 2019, 01:59:04 PM
^This is all speculation of course but the wording and the overall philosophy of the firm would tend to confirm that they would, like the Oracle, tend to build positions in the US-based too-big-to-fail banks.

I have a media article from 2012 (not in Danish or English) that features a member of the Giverny team (who came from the banking sector) who described his line of thought on the topic. He underlined the long-term orientation and the capacity for strong banks to eventually benefit from more difficult environments.

As you likely know, the Giverny group still had (as of Q4 2018) a large position in the Bank of the Ozarks and that bank was not mentioned in the 2012 article. What was discussed then was a position in Wells Fargo and M&T banks and it was explained that both could reasonably be expected to double in the next five years, which is a typical benchmark for them. For M&T, they have historically described respect for Bob Wilmers, the previous leader of the bank and the stock has basically doubled. For WFC, a double would have been within reach absent a temporary lapse in governance but that was hard to predict.

Hope this helps.

BTW Charlie, thank you. The Giverny letter usually comes out contemporary to Mr. Chou's letter who has been a big fan of large US banks through warrants.
Title: Re: Two recent articles by Francois Rochon
Post by: Charlie on March 22, 2019, 02:01:00 PM
I find Mr. Rochon doings and writings always interesting, too and always learn something.  :)

I thought his arguments about the index investing were a little bit weak and his comparison with 1998. He wants to keep his clients.  ;)

I have no idea, but it looks like he bought the additional US banks in 2019. As a Buffett student I would guess he bought BAC, US Bancorp and
Wells Fargo.
Title: Re: Two recent articles by Francois Rochon
Post by: investmd on March 26, 2019, 06:09:25 AM
Thank you for sharing link to 2018 Giverny letter.
Annual outperformance of index by >4%/yr is amazing. Rochon is one of only a very few managers that has done that consistently over 5/10/15 year periods. Whilst there are some historical comparisons for consistent outperformance, who are the comparisons to Rochon's results that are actively managing money today?

I looked at Giverny a year ago and they were not accepting new money from Canadian investors outside Quebec & Ontario I think. Had to do with them applying for some regulatory approval.
Title: Re: Two recent articles by Francois Rochon
Post by: Charlie on April 08, 2020, 11:48:30 PM
2019 annual letter is out:

http://www.givernycapital.com/en/doc/236/Giverny_Capital_-_Annual_Letter_2019_web_.pdf


Cheers!  :)
Title: Re: Two recent articles by Francois Rochon
Post by: VersaillesinNY on April 09, 2020, 07:28:34 AM
Interesting to see that Giverny hired David Poppe from Ruane Cunniff & Goldfarb in order to launch a new investment firm. It will give wings to Giverny's US operations.
My guess is that David Poppe had a one year non compete agreement after leaving RCG, where he worked for almost 20 years.

Title: Re: Two recent articles by Francois Rochon
Post by: stahleyp on May 22, 2020, 06:20:54 PM
Interesting to see that Giverny hired David Poppe from Ruane Cunniff & Goldfarb in order to launch a new investment firm. It will give wings to Giverny's US operations.
My guess is that David Poppe had a one year non compete agreement after leaving RCG, where he worked for almost 20 years.


Letter posted.

https://static1.squarespace.com/static/5e8f1f2a9432801293f6439e/t/5e8f6c4e02b8fa04bead5904/1586457686283/GCAM+initial+letter+2020-03-27.pdf

You would think someone like this would start a hedge fund rather than working for someone else. Yeah, he had a huge blow up...but so do a lot of these guys.